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June 10, 2007

IN BRIEF

Menards opens new ‘megastore’

Menards, the midwestern DIY retail chain, opened a new “megastore” in Saginaw Township, Mich., last week—including groceries and other convenience items alongside typical DIY fare, according to the Saginaw (Michigan) News. Eau-Claire, Wis.-based Menards has opened or plans to open several of the larger variety stores carrying grocery items in locations including Gary, Ind.; St. Cloud, Minn.; Grand Forks, N.D.; and Milwaukee, according to various news reports. The stores employ “grocery specialists,” according to job listings posted by the retailer. In general, Menards stores range in size from 80,000 square feet to 240,000 square feet. The store will employ about 160 people initially. The store was also located very close to a local hardware store called Wohlfeil’s Hardware, an Ace dealer, according to reports.

Home Depot hires former Staples exec

Jack VanWoerkom, 53, has been named executive vp, general counsel and corporate secretary at Home Depot. He will report to CEO Frank Blake. VanWoerkom will replace Jim Snyder, who served as interim general counsel for the past five months. Snyder, 43, will continue as vp-legal at Home Depot. VanWoerkom has served as executive vp, general counsel and secretary at Staples since 2003. Prior to that, he served as senior vp, general counsel and secretary starting in 1999 at the office supply company.

National Nail, the Grand Rapids, Mich.-based maker of nails and fastener systems, has signed a partnership agreement with Shandong Oriental Cherry Hardware Group, one of its primary suppliers. The two firms will enter into several joint ventures, including the sourcing of raw materials and the opening of a new distribution center. Oriental Cherry is one of China’s largest manufacturers of nails and hardware. In addition to making products that sell under the National Nail brand, Oriental Cherry supplies other companies in the United States and Canada. Almost half of its products are exported, with the remainder sold in China. Using online replenishment and forecasting systems, Oriental Cherry will begin manufacturing stock inventory for National Nail. According to Kris Anderson, the company’s director of marketing, National Nail and Oriental Cherry also plan to jointly source steel rod. The new partnership allows Oriental Cherry to expand its distribution in the United States with a facility that will be financed, in part, by a $2 million grant by the Chinese government. The future warehouse will be built at an undetermined location. The inventory will be owned by Oriental Cherry; sales and distribution will be led by National Nail.

H&E to close location

H&E Do-it-Yourself Centers, a five-unit chain of home centers in Southern California, will close its Barstow location next month, according to a report in the Desert Dispatch. H&E still operates four locations in Hesperia, Palmdale, Lancaster and Victorville, all located in the High Desert region east of Los Angeles. The company started as a lumberyard in Barstow in 1952. Company president and CEO Phillip Stein told the newspaper that sales at the Barstow location have dropped significantly since a Home Depot opened in town last year.

Weyerhaeuser sells Canadian distribution centers

Forest products giant Weyerhaeuser has completed the sale of its Canadian building materials distribution centers to Platinum Equity, a Los Angeles-based investment and asset management company. Terms of the deal were not disclosed. The sale includes 16 Weyerhaeuser distribution centers in Canada. Weyerhaeuser noted it still is in preliminary negotiations for the sale of 10 U.S. building materials distribution sites. The distribution business has been established by Platinum Equity as a stand-alone company named Broadleaf Logistics. Paul Perkins, former vp-policy and planning for Weyerhaeuser’s Canadian operations, will serve as CEO of Broadleaf Logistics. Under a distribution agreement between Weyerhaeuser and Broadleaf Logistics, Weyerhaeuser products will continue to be distributed by Broadleaf through the 16 distribution centers.

NEWSMAKERS

Pro-Build purchases Dunn Lumber

Pro-Build Holdings has announced the acquisition of Dunn Lumber, a Florida building materials supplier with locations in Daytona Beach, Orlando, New Smyrna Beach, Orange City and Bunnell.

Terms of the deal were not disclosed. Raymond James acted as the financial agent to Dunn Lumber during the transaction.

Founded as a hardware store in 1905, Dunn Lumber was operated by Barry and Sam Dunn, the latter a former chairman of the NLBMDA. In 2005, Dunn Lumber established an Employee Stock Ownership Plan (ESOP), which now owns approximately 14 percent of the outstanding shares of the corporation. These employees will share in the proceeds of the sale.

The Dunns will remain as consultants to Pro-Build for two years, the statement said. Two other company executives, Gary Farber and Ron Cannon, will oversee Orlando and Daytona Beach, respectively.

Sales for Dunn Lumber were $56 million in 2006. Pro-Build, headquartered in Denver, had sales of $5.95 billion in 2006.

Georgia home builder files Chapter 11

Home builder Meyer-Sutton Homes has filed for Chapter 11 bankruptcy protection from creditors with the U.S. Bankruptcy Court for the Northern District of Georgia.

According to the Fayetteville, Ga.-based company’s filing, the home builder has total assets of about $44 million and debts of $40 million. Meyer-Sutton Homes and Meyer-Sutton Land Acquisition both are listed in the court filing.

“The housing market has suffered a dramatic decline in demand with result[ing] problems of excess inventory and compressed profit margins,” said Meyer-Sutton owner James Buchanan in the court filing.

The company plans to stay in business during its bankruptcy organization, owes bank lenders about $26.5 million and owes trade creditors about $2.8 million. Pro dealer Stock Building Supply is listed as one of the company’s largest creditors, to which Meyer-Sutton owes $1.3 million.

Masco names new CEO, CFO

Building products giant Masco has announced the election of Timothy Wadhams as CEO effective July 1.

Wadhams currently serves as senior vp and CFO. He joined the company in 1976 and holds a bachelor’s degree in economics from the University of Michigan.

Wadhams replaces Richard Manoogian, who announced his retirement in April. Manoogian will take on the role of executive chairman of the board, also effective July 1.

Replacing Wadhams as vp and CFO will be John Sznewajs. Sznewajs currently serves as Masco’s treasurer and vp-corporate development, having joined Masco in 1996 as business development analyst.

Additionally, Masco’s board of directors appointed Donald DeMarie to the position of executive vp. He currently serves as the company’s group president for installation and other services. DeMarie joined Masco in 1995 when the company acquired Gale Industries.

INDUSTRY NEWS

NAR projects gradual upturn in late 2007

Home sales are expected to move in a “relatively narrow range” with a gradual upturn by the end of the year, according to the latest forecast from the National Association of Realtors (NAR).

The NAR reports that existing-home sales are projected to total 6.18 million in 2007 and 6.41 million in 2008, in contrast with the 6.48 million sales recorded in 2006. New home sales are forecast at 860,000 this year and 901,000 in 2008, down from 1.05 million last year.

The national median existing-home price should drop by 1.3 percent to $219,100 in 2007 before rising 1.7 percent next year. The median new home price will probably fall 2.3 percent to $240,800 this year, and then grow by 2.6 percent in 2008, the NAR reports.

CSG releases Openings & Closings Index

Retail research firm Chain Store Guide has released an enhanced version of its monthly Openings & Closings Index.

According to the CSG, 42 new home channel chain stores opened in the United States, while 26 closed in May. Twenty-six percent of the new stores were opened in the Southwest, while 31 percent of the closings of home center stores occurred in New England and the Northeast. In the Southwest, West and East Coast, no home center stores closed in the month of May.

Each month, Chain Store Guide’s database marketing division develops a spreadsheet highlighting the new store location openings and closings captured. Subscribers receive detailed information about store closings and openings at the beginning of each month.

Chain Store Guide is a subsidiary of Lebhar-Friedman, publisher of Home Channel News.